Category: Workers Compensation

Workers’ Compensation

Workers’ compensation is an employer-provided benefit that exists to aid an employee or his dependents in the event that the employee is injured or killed on the job. Workers’ compensation is governed by each state’s laws, but the general consensus is that eligibility for such benefits turns on whether the employee suffered an accidental injury that arose out of and in the course of his employment or an occupational disease.

Benefits

Workers’ compensation benefits fall into three main categories: disability benefits, medical benefits, and death benefits.

  • Disability Benefits: Compensation to the injured employee is based on his “disability” and the concomitant effect on his earning power; it does not emanate from actual need. Rather, the employee is entitled to benefits based on his lack of earning capacity and the amount needed for his support as designated in the particular state’s Workers’ Compensation Act. Generally, cash benefits represent a percentage of the employee’s wages at the time of the injury — oftentimes, between a half and two-thirds — with a weekly maximum benefit mandated. The amount of benefits recoverable correlates to whether the employee is temporarily or permanently disabled.
  • Medical Benefits: Workers’ compensation extends to benefits for the employee’s medical care. An employee’s medical expenses related to his injury are covered and such benefit is usually unlimited given that it aids the employee’s recovery.
  • Death Benefits: The dependents of an employee, who is fatally injured on the job, are entitled to death benefits. Such benefits generally compensate for the costs associated with the employee’s burial. Additionally, benefits are paid to the employee’s surviving spouse and children based on their status. A surviving spouse is entitled to benefits until re-marriage in many jurisdictions; other jurisdictions pay a fixed amount upon the spouse’s re-marriage. As for children, benefits are paid until age 18. This time-frame is extended indefinitely if the child is disabled.

Right to Sue

To obtain workers’ compensation, an employee does not have to prove the fault of his employer in causing or contributing to his injury. In exchange, an employee and his dependents are generally precluded from bringing a common law action for damages against the employer for an injury that is covered by the applicable Workers’ Compensation Act. However, the right to sue others whose negligence caused or contributed to the employee’s injury still stands.

Injured Employee’s Recovery Election

Historically, when an employee was injured in the course of his employment, but at the hands of a negligent third party, he was technically able to pursue relief through both the workers’ compensation system and a third-party action. Though not able to receive a double recovery, the employee was technically eligible to recover under either theory. However, strict election rules required that he choose which theory of recovery he would pursue, even if his “choice” ultimately left him with no compensation at all. For example, the injured employee elects to proceed with a third-party action, thereby foregoing workers’ compensation, but ends up losing the third-party action.

Such a harsh result has been tempered over time in most states. Now, employees who elect to pursue a third-party action, but who are less than successful in such enterprise, are not barred from workers’ compensation. Further, even though an employee applies for workers’ compensation benefits, he is not completely prohibited from attempting to gain a recovery from a third party. Of note, Minnesota retains the doctrine of strict election with respect to situations where the employer and the third party are operating in furtherance of a common enterprise or, at the time that the employee was injured, are operating to accomplish the same purpose, or a related purpose, at the location where the employee was injured.

Dual-Purpose Travel by Employee

“Dual-purpose” travel by an employee occurs when the employee embarks on a trip on behalf of the employer that coincides with travel for the employee’s benefit. In other words, the journey serves both the business purpose of the employer and the personal purpose of the employee. Characterization of the trip as business, personal, or both does not have to be made at the outset of the trip. A trip can start out as purely personal but then transform into a business endeavor.

If the employee is injured during the course of the dual-purpose travel, he will be allowed workers’ compensation benefits if the service on behalf of the employer would have necessitated the trip even if the personal nature of the trip was not present. On the other hand, compensation would be denied if his employment did not necessitate the need for the trip and if the trip would not be made at all should the personal nature of the excursion evaporate.

Compensation for injuries occurring during dual-purpose travel can often be discerned from a quantitative standpoint. Basically, whether the measure of the trip is one that would justify an independent excursion on behalf of the employer. For example, an employee, who is a chef, plans a trip to Mexico for vacation. His employer, a catering business, asks him to bring back a case of salsa for serving at a Cinco de Mayo party it will be catering. The cost of the salsa equaled about $ 50. The fact that the sole employment connection with the trip was a mere $50 is a good indicator that the trip was a personal venture with the benefit to the employer being incidental. The employee would still take his vacation trip to Mexico even if the employer decided that the salsa was not needed. On the other hand, the employer would not spend the substantial amount of money necessary to fly to Mexico just for $ 50 worth of salsa. As a result, if the employee is injured while in Mexico, the fact that he purchased salsa for his employer would not re-characterize the trip such that workers’ compensation for the injury would be warranted.

Fault of Employee

A core principle within the area of workers’ compensation is that the question of “fault” is largely irrelevant. It is only when the employee’s “fault” in connection with the injury is occasioned by him leaving the course of employment or is a statutory defense in a jurisdiction will the inquiry come into play. The test for workers’ compensation is generally not personal such that an employee’s misconduct, whether negligent or intentional, will affect the receipt of benefits. Rather, the test is merely whether the injury arose out of and in the course of employment.

When an employee engages in misconduct that causes him injury, an examination of the relevant state’s statute is a foremost consideration because that is usually the only way for an employer to use the employee’s “fault” as a defense. Failing this, “fault” inquiries in relation to employee misconduct is generally limited to an employee’s fraud in obtaining workers’ compensation benefits.

When an injury is not incurred in the course of employment, the employee is not entitled to compensation. Therefore, a “fault” inquiry may be crucial when the employee is injured as a result of a deviation from the course of employment. A key example is where an employee engages in prohibited conduct and is then injured. The employee’s “fault” in leaving the course of employment to engage in such conduct may take him out of the protective realm of workers’ compensation.

Act of God and the Concept of “Arising Out of the Employment”

An act of God includes natural occurrences over which man generally has no control such as tornadoes, hurricanes, earthquakes, and lightening. Though an employee is injured due to an act of God, he may still recover workers’ compensation benefits if he can show that the nature of his employment placed him at a greater risk for injury due to such an act of God. For example, consider the repairman who is required to work on downed power lines during a storm. He performs his work while a thunderstorm rages by standing in a bucket raised high into the air from the back of his repair truck. This situation would appear to elevate the employee’s chances of being struck by lightening over the average individual. As such, it is likely that the employee would be compensated for an injury by lightening.

Compensation may be harder to obtain for injuries from some acts of God as opposed to others. Whereas lightening is a more localized phenomenon, a hurricane is widespread and can affect hundreds, if not thousands, of individuals. As a result, it can be harder to obtain compensation in the face of the argument that the employee would not have been any safer had he been in a location that was not occasioned by his employment.

Instead of applying the increased-risk test, some courts determine compensability based on the position of the employee when the injury occurred. Basically, if the employee is directed by his employer to be at a certain place at a given time, and is subsequently injured due to the unfortunate location and timing, compensation will be allowed. This is so even though any other individual, not a part of the employer’s workforce, would have suffered the same injury as the employee.